The 5 line items that move more money than the multiple
I am not a broker and I am never going to be one, so read this knowing I do not get paid if you sell.
Most owners negotiate the multiple for six weeks and the structure for about nine minutes. Then they are surprised when a good price turns into a bad outcome. The structure is where the money is, and almost nobody negotiates it with the same energy.
Here is the thing I have seen more times than I can count:
"You could have the exact same personality, the exact same thesis, and with a different structure, nobody gives you a dollar and it doesn't matter. Your materials could be amazing, your team can be amazing, and with the wrong deal structure, or you're locked into one structure, then the deal is dead and you don't get anywhere."
That is true for raising capital and it is just as true for selling.
The two buyers
Let me show you what I mean with numbers instead of theory. Same company, $2.5 million of EBITDA, two different buyers, same week.
Buyer A pays 4x. $10 million, all cash at close. $7 million of it borrowed on a personal guarantee. The seller walks out the day it closes. No escrow, no earnout, and a non-compete nobody would ever bother enforcing.
Six months in, half the customer relationships followed the seller out the door. EBITDA is $1.2 million. Buyer A personally owes $7 million against a business now worth about $5 million.
He got a steal. It ruined him.
Buyer B pays 7x. $17.5 million. Everybody told him he overpaid.
But it was $3.5 million cash down. $7 million seller note at 6% over eight years, paid only out of free cash flow. $7 million earnout over four years tied to revenue. Seller stays 24 months. No personal guarantee anywhere.
If the business drops, the note slows down and the earnout never pays.
Buyer B paid 75% more and put roughly 80% less at risk.
One negotiated the number. One negotiated the deal.
The 5 line items
1. The earnout metric. Most earnouts get written on a number the seller will no longer control. If you are handing over the customer relationships on day one and the earnout is tied to revenue growth in year three, you have agreed to be paid on somebody else's performance. Tie it to something you still touch, or shorten it, or price it into the number up front.
2. The working capital peg. This is the most boring line item in the whole document and it moves six figures quietly. It gets set in a schedule nobody reads out loud, and the true-up happens 90 days after close when you have no leverage left.
3. Escrow and reps. How much, for how long, and what triggers it. An 18 month escrow at 15% is a completely different deal from a 12 month escrow at 8%, and the multiple is identical in both.
4. What happens to your key people. Your general manager of 14 years has no contract and no retention. The buyer knows that. Either you handle it before the LOI or the buyer handles it after close, and only one of those versions is good for the person who has been loyal to you.
5. Whether you are working for the buyer for 3 years. Sometimes that is fine. Sometimes it is the worst part of the deal and nobody priced it, because it does not show up anywhere in the purchase price.
The one thing that costs nothing and happens before any of this
Structure the family office and the holding entity before the exit, not after.
Doing it after is 10x more expensive and sometimes it is just impossible. I have watched families leave eight figures on the table over a sequencing mistake, and the whole fix was a conversation 18 months earlier with a proactive tax planner instead of a reactive one. Those are two different jobs and most people only ever hire the second one.
And the part people get wrong about the buyer
"Somebody might be obsessed with getting an X, even a multiple, in their plumbing company, or a certain NOI multiple on a real estate property. You might be able to give them exactly what they're asking for, and then structure a deal that makes it way better than if you got it at a 5x but then you had to put all the money up front and deal with a bank. Like, yeah, if you do seller financing and carry some and do this and that, I'd be happy to do the 8. And they get to say at the golf course they sold for 8x, and then you do right by them, and everybody's happy."
That cuts both ways and it is worth understanding from the seller's chair.
The number you tell people at the golf course and the money you actually take home are two different things, and you can often trade one for the other on purpose. If the multiple matters to you for reasons that are not financial, and that is a completely legitimate reason, then say so and trade it for terms. If what matters is the money and the risk, stop defending the multiple.
What usually actually happens
So what is actually on your term sheet right now? If you want a second read with no fee attached, tell me your situation.